Air France-KLM Changes Top Management

Jean-Cyril Spinetta and Leo van Wijk, who masterminded the first merger between two European flag carriers in 2004, are stepping down and handing over the reins of Air France-KLM Group to a younger generation.

The board of the French-Dutch group today appointed Alexandre de Juniac chairman and CEO of Air France-KLM Group and Peter Hartman deputy CEO, succeeding Vice Chairman van Wijk, as of July 1.

De Juniac became chairman and CEO of Air France in 2011. He will be replaced in that role by Air France CFO Frederic Gagey. KLM named Camiel Eurling, former head of KLM’s cargo operations and a former Dutch transport minister, to succeed Hartman as CEO and president of KLM.

The reshuffle of Air France-KLM Group’s top management is part of a broader plan to restructure the company’s governance and move toward a deeper integration of the two airlines to facilitate cost reduction, eliminate overlaps that still exist 10 years after the merger was completed and speed up decision-making. The new corporate structure was designed at the end of 2011, when Air France-KLM Group and Air France CEO Pierre-Henri Gourgeon was ousted following deepening losses and increasing debt.

Veterans Spinetta and van Wijk were called back to return the group to solid footing. An in-depth restructuring and cost-cutting program, called Transform 2015, was launched last year simultaneously at Air France and KLM.

Spinetta, who will turn 70 in October, announced earlier this year he would step down in 2014, but the date has been moved forward by nine months.

In a joint statement, Spinetta and van Wijk said that Transform 2015 is starting to “bear fruit” thanks to the agreements signed by both airlines with the representative trade unions and works councils. Also the group’s net debt decreased in 2012, and the new governance of the Air France-KLM Group will be in place by July.

“Under these circumstances, we believe the timing is right for the new management team to take over in order to ensure the continuity of the group’s economic and financial recovery and the implementation of its new governance,” the executives said.

Air France-KLM’s recovery plan aims to reduce the company’s debt by €2 billion ($2.6 billion) and improve its productivity by 20% to better compete with the low-cost carriers and Middle East operators. The plan will lead to the loss of 5,000 jobs at Air France and 1,300 at KLM.

The company posted a €1.2 billion net loss in 2012, widened from a €805 million deficit the year before, that included a €471 million charge related to the restructuring.